U.S. House OKs bill to shield airlines from EU carbon fees

WASHINGTON (Reuters) - The U.S. House of Representatives voted on Tuesday to bar airlines from complying with a European Union law that would force them to pay for their carbon emissions one day after the EU offered to stop the clock on enforcing the measure.

The bill, which was the first piece of legislation to be debated on the House floor after a pre-election recess, directs the transportation secretary to decide to shield U.S. airlines from Europe's carbon emissions trading system if he deems it necessary.

The EU said on Monday it would "stop the clock" on enforcing its law to create a positive atmosphere for international talks on an alternative global plan to tackle airline emissions.

"We are notifying the EU that we are not going to support the scheme, and in fact we want a ... long-term solution, but we will not allow the United States to be held hostage," said Representative John Mica, chairman of the House Transportation and Infrastructure committee.

The bill already cleared the Senate in a unanimous vote in September and will be sent to President Barack Obama for signature.

The White House has not yet taken a position on the bill.

Mica said that despite the EU concession to put its law on hold for one year while the U.N.'s civil aviation body crafts a global framework to address the sector's emissions, the United States had to prevent it from imposing its law again a year from now.

The governing council of the International Civil Aviation Organization (ICAO) concluded a meeting last Friday, which approved a new process and timeline for the body to decide on a global framework to help the aviation sector slash their greenhouse gas emissions.

The EU, which praised the outcome of that meeting, has said it would scrap the application of its carbon market to non-EU airlines if ICAO can deliver an acceptable framework.

SOVEREIGNTY

Mica said on the House floor that the point of the legislation was to "hold people's feet to the fire in respecting U.S. sovereignty."

"ICAO does not set policy of the United States of America. We are a sovereign nation. We must defend our sovereignty in concurrence with international trade agreements," he said.

The Florida congressman said the fact that both the House and Senate passed bills with bipartisan support likely piled enough pressure on the EU for it to back down from applying its law.

TRADE WAR WARNING

Democratic Representative Henry Waxman, ranking member of the House Energy and Commerce Committee, called the bill "counterproductive" on the House floor.

"Rather than doing something constructive to address global warming, we are going to start a trade war with the Europeans," he said.

Waxman authored a bill that would have created an economy-wide carbon cap-and-trade program that passed the House in 2009, but failed to win support in the Senate.

Waxman warned that the bill would interfere with efforts under ICAO to broker an international agreement by next autumn.

Isaac Valero-Ladron, a spokesman for the European Commission, said the United States needs to prove it is serious about contributing to a global solution to address rising emissions from the aviation sector.

"Opponents of the inclusion of our legislation have always said that a global solution under ICAO is the way to go. The EU has done its part. Now it's up to the U.S. to show that they are serious about pushing for a global solution," he said.